Sports Illustrated, the venerable bible of sports journalism, has been in decline for years, as the Internet wiped out print magazines and cost-cutting turned the weekly into a monthly and cut its staff. But on Friday, the magazine suffered perhaps the biggest blow it has ever faced.
The company that publishes Sports Illustrated said in an email to its employees that it was laying off many of them, casting doubt on the publication’s future.
The move comes after the Arena Group, which publishes the magazine and website under a complex management structure, had its license to operate the publication revoked.
Sports Illustrated reporters and editors were invited to attend a Zoom call Friday at 2 p.m. Eastern. It only lasted seven minutes. On the call, Jay Frankl, Arena Group’s new director of business transformation, said, “We will continue to produce the Sports Illustrated brand and online content until the situation is fully resolved,” according to a recording of the meeting heard by The New York Times. No questions were taken.
Some Sports Illustrated staffers received emails with immediate layoff notices, while others were told in other Zoom meetings that they would keep their jobs for at least 90 days. (About 100 journalists work for Sports Illustrated.) Arena Group executives have told Sports Illustrated staffers that they plan to continue publishing the magazine and website, despite the revocation of their license to operate the publication. But it was not yet clear how this would work. It was also unclear whether the magazine’s owner, Authentic Brands Group, would enter into a new deal with Arena Group or find a new company to operate it.
But it seems certain that even if Sports Illustrated survives in some form, its business will be significantly reduced.
The mood among staff following the layoff announcement was a mix of anger, frustration and confusion. Sports Illustrated journalists sent each other texts and Slack messages, in some cases unsure who had been fired and what the magazine’s ultimate fate would be.
For decades, Sports Illustrated was a weekly must-read for sports fans and a financial engine for the Time Inc. empire. It once had more than three million subscribers and its writing, reporting and photography were considered the pinnacle of sports journalism. Landing on the cover was the most coveted endorsement an athlete could receive, even in the age of television and the Internet. And its annual swimsuit issue was a pop culture phenomenon.
“I think it’s one of the best magazines that has ever existed, with some of the best photographers, writers and editors that have ever been in one building,” said Rick Reilly, who for years wrote the popular back page column of the magazine. He added: “If he’s really dead, he’s kind of dying. »
Sports Illustrated has indeed been struggling for years. It struggled to transition to the world of digital media and was hampered by poor management.
Meredith purchased Time Inc., which included Sports Illustrated and other media assets, for $3 billion in 2017. Two years later, the media conglomerate sold Sports Illustrated to Authentic Brands Group, which is primarily a licensing company which acquires the rights to celebrity brands. for $110 million. It was purchased for the value of the Sports Illustrated name and intellectual property, not because Authentic Brands Group intended to run a magazine.
The Arena Group – which owns Men’s Journal, Parade and TheStreet and was previously known as Maven – quickly reached a 10-year deal with Authentic Brands Group to operate and publish Sports Illustrated. Article paid at least $45 million for the right to do so, while Authentic Brands Group retained the commercial rights for things like a Potential Sports Illustrated-branded hotel in Michigan.
In a statement, Authentic Brands Group said it was committed to ensuring that “the Sports Illustrated brand, which includes its editorial arm, continues to thrive as it has for the past nearly 70 years.”
Arena Group is in negotiations with Authentic Brands Group and plans to continue publishing Sports Illustrated, said Rachael Fink, Arena Group spokeswoman. “We hope to be the company that moves SI forward, but if not, we are confident that someone will,” she said in a statement.
Over the past decade, Sports Illustrated’s newsroom has shrunk. The company’s last photographers – the “pictures” in Sports Illustrated – were laid off in 2015, and several rounds of layoffs followed. The magazine, formerly published weekly, now appears monthly. Many articles published on its website are now written by low-paid contractors.
Despite these changes, the publication’s digital audience has continued to grow. In December, Sports Illustrated attracted more than 50 million visitors, according to Comscore, doubling its audience from four years earlier.
The layoffs at the magazine are the latest bad news for the publishing industry, whose fortunes have gone from bad to bleak in recent months. High-profile publications like the Los Angeles Times and the Washington Post, which are owned by deep-pocketed billionaires, have scaled back their newsrooms over the past year as advertising revenues dried up and it became apparent difficult to attract new subscribers online. Even startups that were once seen as the future of the media industry — like BuzzFeed and Vice — have abandoned or sharply scaled back their news-gathering efforts as investors poured money into digital publishing.
The union representing Sports Illustrated has confirmed that Arena Group is laying off numerous Sports Illustrated employees.
“This is another difficult day in what has been a difficult four years for Sports Illustrated under the leadership of Arena Group (formerly Maven),” the union said. said in a statement. “We ask ABG to ensure the continuity of SI’s publication and allow it to serve our audience as it has for nearly 70 years.”
These past few months have been particularly tumultuous at Sports Illustrated. In August, Manoj Bhargava, the entrepreneur behind the 5-Hour energy drink, agreed to buy a higher stake in Arena Groupraising hopes that it could bring some stability.
But soon after Mr. Bhargava agreed to buy the stake, Sports Illustrated was thrown into chaos. Several senior Arena Group executives were forced to leave the company, including its chief executive, Ross Levinsohn; its president, Rob Barrett; its chief operating officer, Andrew Kraft; and its general counsel, Julie Fenster.
In November, reports circulated that Sports Illustrated had published product reviews under fake author names, apparently generated by artificial intelligence, and the Arena Group blamed a vendor.
“My God, they had AI writers with stories, robots that they were trying to pass off,” Mr. Reilly said, before invoking renowned Sports Illustrated writers. “This is a place that hired Jim Murray and Dan Jenkins!”
The situation got worse afterwards. At the beginning of January, the Arena Group failed to make $3.75 million payment to Authentic Brands Group, violating its license agreement. Days later, Mr. Bhargava resigned as interim CEO and the company signed a deal with FTI Consulting to help turn around the business.
Matters came to a head Thursday, when Authentic Brands Group sent Arena Group a letter terminating Sports Illustrated’s license, according to public records, triggering an immediate $45 million payment to Authentic Brands Group. The same day, Arena Group announced it was cutting a third of its workforce.
Mr. Levinsohn — who himself oversaw cuts in the Sports Illustrated newsroom amid industry headwinds — resigned from Arena’s board on Friday. I have reacted to news of the layoffs on LinkedIn, calling them “one of the most disappointing things I’ve ever witnessed in my professional life.”
A spokesman for Mr. Bhargava, Steve Janisse, said in a statement that Arena Group was in “active negotiations” with Authentic Brands.
“And we are not the only ones,” Mr. Janisse wrote. “They were also approached by others. Building on this interest, we hope that the great institution that is Sports Illustrated will endure, survive and grow. »
In 2020, Arena Group shares were trading as high as $14.20. As of Friday, they were trading at less than $1.
